Correlation Between Batm Advanced and STM Group
Can any of the company-specific risk be diversified away by investing in both Batm Advanced and STM Group at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Batm Advanced and STM Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Batm Advanced Communications and STM Group Plc, you can compare the effects of market volatilities on Batm Advanced and STM Group and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Batm Advanced with a short position of STM Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batm Advanced and STM Group.
Diversification Opportunities for Batm Advanced and STM Group
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Batm and STM is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications and STM Group Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STM Group Plc and Batm Advanced is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Batm Advanced Communications are associated (or correlated) with STM Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STM Group Plc has no effect on the direction of Batm Advanced i.e., Batm Advanced and STM Group go up and down completely randomly.
Pair Corralation between Batm Advanced and STM Group
Assuming the 90 days trading horizon Batm Advanced Communications is expected to under-perform the STM Group. In addition to that, Batm Advanced is 2.97 times more volatile than STM Group Plc. It trades about -0.01 of its total potential returns per unit of risk. STM Group Plc is currently generating about 0.05 per unit of volatility. If you would invest 5,500 in STM Group Plc on September 1, 2024 and sell it today you would earn a total of 650.00 from holding STM Group Plc or generate 11.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 92.65% |
| Values | Daily Returns |
Batm Advanced Communications vs. STM Group Plc
Performance |
| Timeline |
| Batm Advanced Commun |
| STM Group Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Batm Advanced and STM Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Batm Advanced and STM Group
The main advantage of trading using opposite Batm Advanced and STM Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batm Advanced position performs unexpectedly, STM Group can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in STM Group will offset losses from the drop in STM Group's long position.| Batm Advanced vs. Samsung Electronics Co | Batm Advanced vs. Samsung Electronics Co | Batm Advanced vs. Hyundai Motor | Batm Advanced vs. Toyota Motor Corp |
| STM Group vs. Bisichi Mining PLC | STM Group vs. GreenX Metals | STM Group vs. Wheaton Precious Metals | STM Group vs. Hochschild Mining plc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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